How is the transfer fee calculated if an Alloy franchisee attempts a transfer without consent?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
val will not be withheld unreasonably. You immediately must notify us of any proposed transfer and must submit promptly to us the application for consent to transfer and any other required documents and information. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, any attempted transfer without prior written consent or not complying with the terms of the Franchise Agreement will be considered void. In this case, the franchisee's interest in the agreement will be voluntarily abandoned. Alloy has the right to either consider the franchisee in default and terminate the agreement or to collect a transfer fee. This transfer fee is equal to two times the standard transfer fee.
The standard transfer fee for an Alloy franchise is $10,000. Therefore, if a franchisee attempts to transfer the franchise without Alloy's consent, the transfer fee due would be $20,000. This fee serves as a penalty for not adhering to the proper transfer protocols outlined in the agreement.
This provision highlights the importance of following the proper procedures for transferring an Alloy franchise. Franchisees should ensure they obtain prior written consent from Alloy and comply with all terms of the agreement to avoid incurring the higher transfer fee or risking termination of the agreement. It is common practice in franchising to have transfer clauses and fees, as the franchisor needs to approve new franchisees to protect the brand and ensure quality standards are maintained.